The Only 3 Metrics You Need To Focus On To Scale To 6 Figure Months!

If you are struggling to turn a profit from your advertising spend and you’ve tried buying traffic on countless different traffic sources again and again but you’ve consistently lost money… then this will be the most important blog post you will ever read!

In this post i’m going to share with you the 3 most important metrics that if you focus on and get right… will help you scale your business to the point of generating your first 6 figures in a single month QUICKLY!

Now before I explain these key 3 metrics you MUST understand the golden rule of media buying!

And that is…

Winning Campaigns Are NEVER Found... They Are MADE!

Which means the likelihood of you launching a campaign on ANY traffic source and it coming out profitable right away is EXTREMELY UNLIKELY!!

So stop looking for “the secret golden traffic source” that you marketers have fooled you into believing that if run on a “secret hidden traffic source”, you’ll magically start seeing 10,000% ROI campaigns!

It’s straight BS!

The simple fact is – people are making money with EVERY traffic source!

So NEVER blame the traffic source! (This is what unsuccessful newbies do)

And start looking at your ability to create and engineer WINNING FUNNELS that can convert the traffic that already exists on these platforms into profits for your business.

Your ability to craft and engineer winning funnels is going to determine whether you get profitable with ANY traffic source whether it be a:

Advertorial -> Core Offer funnel

Landing page -> Tripwire -> Core Offer Funnel

VSL -> Core Offer Funnel

Presell Page -> Core Offer Funnel

…And the list goes on!

So now that you’ve hopefully understood that it is NEVER the traffic sources problem that you’re not profitable, and the reason why you’re not profitable comes down to your FUNNEL…

…let me break down the 3 KEY Metrics that will help you get profitable on any traffic source so you can take your businesses to the point of doing 6 figures in a single month!

Money Metric 1 – Cost Per Acquisition (CPA)

Put simply, this is how much it costs you to acquire a customer in your business.

Yes other fancy metrics like “Click Through Rate” “Ad Reach” “eCPM” and all the other nice metrics on your tracker is all exciting and flashy, but at the end of the day, these are just INDICATORS of performance

…but these are not true MONEY METRICS for your campaign that will determine how well a traffic source is performing for you.

Think about it does a 20% CTR ad of a hot girl mean you’re going to be more profitable than 2% CTR ad that speaks to your exact target market?

NO! So don’t focus on these nice “fluffy” indicators and strip your metrics down to focus solely on how much it costs you to acquire a CUSTOMER!

Now to calculate your cost per acquisition on any traffic source simply:

take your ad spend and divide it by the number of new customers you generated from the ad spend

So as an example is you spend $1,000 on ads and you’re able to bring in 10 new customers:

$1,000 Ad Spend ÷ 10 New Customers = $100 To Acquire A New Customer

Here’s an example of some Facebook campaigns where I’m paying Between $23.04 To $65.22 To Acquire A $7 Customer!

Knowing how much it costs to acquire a customer on a traffic source is VITAL information for your business that will determine whether you will ever be able to grow to scale!

So you must TRACK your metrics to find what this number is for your business.

Now once you know this number, after gathering spending some $$$ on traffic to your funnel and you have some statistically significant data…

…then you can try and lower this number by testing variations of your ad, targeting, placements, bids and optimize your funnels to try and get this number lower, which could help you to increase your profitability.

BUT… don’t be fooled by people that sell you on the notion of “cheap traffic” or “cheap leads”

…because “Cheap traffic” does not always mean you will get a lower cost per acquisition value for your business!

There have been multiple instances where I’ve paid more for a specific traffic spot versus a “cheaper option” but because of the quality of the traffic, my cost per acquisition was LOWER with the higher priced traffic compared to the “cheaper penny click traffic.”

Money Metric 2 – Average Cart Value

This means the average order amount that each new customer makes in your business!

The higher your average order amount... The more you can afford to pay a traffic source to acquire a customer!

To calculate it simply take:

The total revenue you make on the front end of your funnel (including your upsells & downsells) and divide it by the number of customers you have!

So as an example if you made $5,000 in revenue from your funnel including upsells and downsells, with 250 customers then each customer is worth:

$5,000 total revenue ÷ 250 customers = $20 Average Cart Value!

Each customer is worth $20 to your business so you can afford to spend up to $20 on ads to break even on the front end to acquire new customers!

Here’s an example of one of my funnels where my average customer value of a $7 customer is $394.86!

Now here’s why this is a major metric for success…

The Person Who Can Afford To Pay The Most To Acquire A Customer WINS!

Now lets imagine there are 2 businesses selling a $7 item on the front end!

Business A can afford to spend $20 to acquire a new customer and still break even

Business B can afford to spend $100 to acquire a new customer and still break even

Business B will be able to DOMINATE the market place and will be able to completely wipe out Business A!

The reason why is not because they’ve found a “Hidden cheap secret golden traffic source” lol

…But they have focused on building out a BULLET PROOF funnel that properly monetizes each $7 customer to be worth much more than $7 to them in their business and can pay up to $100 to acquire a new customer and STILL break even on the front end!

So this is why knowing your metrics is so important and tracking EVERYTHING because Business B can go to virtually any traffic source like facebook Google etc

…and as long as they can acquire customers for less than their average cart value, they can run ads there all day long and get leads and customers for FREE essentially!

So your whole goal with media buying is to simply:

Customer Acquisition Cost < Average Cart Value

And if you can do this, then my friend you can grow to scale VERY QUICKLY!

BUT… Focusing On Improving Your Average Cart Value Will Make You More Money FASTER Than Just Focusing On Lowering Your Customer Acquisition Cost!

The reason why is because if you can get a high average cart value amount per customer, you can literally have bad conversion rates on your funnel (Which again are only indicators) but still be PROFITABLE!

And ideally to grow at scale you want to be able to focus on breaking even on the front end as fast as possible so you can buy traffic anywhere and acquire customers and leads for FREE essentially!

This way you can grow your business with much less risk and grow FAST by being able to reinvest cash back into your business to acquire more customers!

So I use the Pareto principle… and spend 80% of my time testing ways to increase my average cart value and 20% of my time focused on lowering my customer acquisition cost!

Money Metric 3 – New Customers Daily

So now you know your Customer Acquisition Cost your Average Cart Value and ideally you’ve increased your average cart value to the point where you’re breaking even on the front end, then your only job now is to…

Get New Customers Daily!

When running ads – just know you should typically always focus on targeting big audiences to really make some serious money and to grow your business at scale!

Targeting big audiences will allow you to run your ads for longer… so if you can make a return on an ad to a large audience you’ll make way more money and be able to scale faster and grow your customer base rapidly & more consistently!

Just know though that scaling your business can sometimes affect your metrics and that each traffic source you use may have different Average Cart Values compared to others!

For example, JV traffic to a warm list for a subscription based product may have a higher average cart value than using pop traffic to a sales funnel where the visitor may not be targeted.

So it’s important to track your customer acquisition costs and your average cart value for each channel that you are advertising on!

So it’s important to track your customer acquisition costs and your average cart value for each channel that you are advertising on!

Make sure you set daily goals for yourself for the amount of customers you want to acquire to for your from each channel and scale hard but SMART…

…where you know you always have enough cash flow to sustain growth for your business just in case something crazy happens like a merchant account shuts you down and freezes your money! (Which has happened to me multiple times lol!)

Here’s What To Do Next!

Did you like what you’ve read and know someone else that could benefit from learning about these 3 key business growth metrics?

Click one of the share buttons to share this post with your friends if you found it valuable 🙂

Also, feel free to leave a comment below with your biggest takeaway or if you have any questions!

Share

Joshua Oluwasanmi Adesiyan

Hello, It’s been a while since you updated your blog. Just knowing about you and reading your blog I noticed the articles here were posted in 2016. I personally need to read more of your articles or content.